A company stocks an item at 0.5 pesos per item per day. The item is consumed at therate of 150 items per day. Setting up an order costs 75 pesos. Suppose shortage is notallowed.(a) What is the optimal inventory policy? What is the total inventory cost incurredby the company with this policy?(b) How much will the company save with this new policy if the original policy of thecompany is ordering 150 items per day?(c) If there is a 5-day lead time between placing and arrival of orders, what will be theoptimal inventory policy?

Find the Given details below: Given Details: Demand 150 items/day Annual Demand (D) 54750…

Answered: A company stocks an item at 0.5 pesos…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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